Mexican industry that remains immune to Trump´s rhetoric

According to KPMG research, the refreshment industry will not be affected by the protectionist rhetoric of President Donald Trump.

In the era of Trump when economic uncertainty seems to adversely affect several industries there is one that seems untouchable: the refreshment industry even despite taxes and health warnings.

In 2016, the soft drink and water industry in Mexico enjoyed a 3.78 percent increase in sales in the third quarter, and in total, 18.8 billion litres of soft drinks were sold. In the last five years the industry has maintained an annual growth rate of 1.3 percent, according to figures from consultancy KPMG.

It is an industry that Donald Trump cannot affect according to Lorenzo Gómez Morín, manager of KPMG’s global strategy area in Mexico, and notes that the sustained pattern of industry growth is not being threatened.

“Their cost (soft drinks) base does not depend on imported inputs, they are ‘necessary’ products to the consumer and are not elastic to price increases and the consumer seeks to continue buying,” says Oscar Silva, a partner at KPMG.

The diversification of products has been very important, the growth we have seen in the last five years is not only motivated by the sale of conventional products, but we have identified new consumption patterns in energy drinks and flavoured waters, juices, teas and coffees. Therefore growth has been very dynamic.

Mexicans occupy the fourth place in the world in consumption of refreshment with person with an annual consumption of 137 litres, according to figures obtained from the consultancy Euromonitor.

For several years, various organizations have struggled to regulate and impose higher taxes on sugary drinks, as it is believed to be a major source of obesity and diabetes. In 2012, the International Diabetes Federation estimated that there were more than 371 million individuals with the disease and that 4.8 million died because of it.